Fred Nile holds the balance of power following the NSW state election. Photo: Darren Pateman

But it has privately told him it remains open to further discussions.

The Christian Democratic Party MP, whose vote is crucial to the passage of the government's electricity privatisation legislation, says Deputy Premier Troy Grant contacted him to discuss the response before it was made public.

"He said the fact that they had not accepted it at this stage didn't mean that there was a permanent rejection and we want to have further discussions on some of these key recommendations," Mr Nile said.

"He said: 'I didn't want you to feel disappointed that we had not accepted them. The door is still open on those recommendations'."

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The inquiry was agreed to at Mr Nile's request as the government was seeking his support for legislation to allow billionaire James Packer to operate a casino at Barangaroo.

Its final report recommended the government review the maximum jackpot size, the existing cash limit on ATMs inside gambling venues and consider a maximum bet limit.

But in its official response, the government says it does not support the recommendations on jackpots and maximum bets "at this time". It has rejected the recommendation on cash withdrawals limits.

It says there is no research to suggest what size maximum jackpot would deter problem gamblers without inconveniencing other players.

Similarly, it says there is no research to recommend a maximum bet limit or suggest what level of daily cash withdrawal limit would benefit problem gamblers.

The government has agreed to commission research within six months into the benefits of setting a minimum distance between poker machines and cash machines and a scheme for banning problem gamblers from pubs and clubs.

It has also agreed to review the Local Impact Assessment process, which is used to determine whether or not to approve increases in poker machines at a venue.

But it argues an interim freeze on poker machine transfers – another key recommendation – is contrary to the policy of reducing the number of machines in NSW by requiring some entitlements to be relinquished when they are traded.

Greens MP John Kaye, an inquiry member, said it was "a very bad beginning to Fred Nile's relationship with the Baird government".

A spokeswoman for Mr Grant said the government "has committed to further work to examine the issues raised by the select committee in its report".

"The NSW government acknowledges the issues raised in the report are complex and will continue to discuss appropriate responses to the recommendations," she said.